Mubadala Development Corporation, Abu Dhabi’s sovereign wealth fund, is in talks to buy up $US1 billion worth of assets from former Brazilian billionaire Eike Batista’s commodities and logistics empire,
Batista took a $US2 billion loan from the fund back in March of 2012 in exchange for 5.63 per cent preferred equity interest in EBX — Batista’s holding company. At that time, EBX, which houses six companies under its umbrella, was valued at $US35.5 billion.
Now it’s unclear how much EBX is worth. What we do know is that Batista has a $US1.85 billion stake in the assets Mubadala is looking at.
Spokesmen for the fund have said they expect Batista to honour the remaining $US1.5 billion of debt he owes them. This asset sale seems like a good start, as it comprises a significant chunk of Batista’s empire.
The negotiations are for stakes in oil producer OGX Petroleo & Gas Participacoes SA, MMX Mineracao & Metalicos SA and LLX Logistica SA’s Acu port in Rio de Janeiro state, said the people, who asked not to be identified because the discussions are private. Mubadala is seeking international or local companies as partners on the deal, the people said.
Batista’s AUX gold business in Colombia is already being used as collateral for $US1.5 billion he owes Mubadala after the fund converted a preferred equity investment in the former billionaire’s holding company, EBX Group Co., into debt last month, one of the people said. That arrangement will probably stay in place should a transaction involving the other Batista holdings be completed, the person said.
It’s important to remember that Mubadala is just one of the creditors knocking at Batista’s door. Even if Batista does manage to mollify Mubadala, he has other powerful entities to contend with.
We wonder if he’s answering his phone …